ANNEX B-1: RETIREMENT ADEQUACY MEASURES

Transcription

1 ANNEX B-1: RETIREMENT ADEQUACY MEASURES The following Budget 2015 initiatives help Singaporeans save more during their working years for retirement, and provide greater support in old age: (A) (B) (C) (D) Higher CPF Salary Ceiling and Supplementary Retirement Scheme Contribution Cap; Raising CPF Contribution Rates for Older Workers; Enhancing progressivity through Extra CPF Interest; and Silver Support Scheme. (A) Higher CPF Salary Ceiling and Supplementary Retirement Scheme (SRS) Contribution Cap To keep pace with wage growth in recent years, the CPF salary ceiling will be raised from $5,000 to $6, This will enable middle-income Singaporeans to accumulate more CPF savings for their retirement. The change applies to all age groups and will take effect from 1 January 2016, to give employers sufficient time to adjust to the changes. Consequently, the annual contribution cap within the SRS will be raised in line with the higher CPF salary ceiling from 1 January 2016 as shown in Table 1 below. Table 1: Increase in Annual Contribution Cap for the Supplementary Retirement Scheme Singaporean/ Singapore Permanent Resident Foreigner Current Cap $12,750 $29,750 New Cap $15,300 $35,700 1 The last change in the CPF salary ceiling was in 2011, when it was increased from $4,500 to $5,000. MINISTRY OF FINANCE

2 The existing limits on tax reliefs for CPF and SRS contributions will be raised accordingly. (B) Raising CPF Contribution Rates for Older Workers The CPF contribution rates for workers aged above 50 to 65 years will be increased from 1 January 2016 as shown in Table 2 below. This final step will restore the contribution rates for workers aged 50 to 55 years to the same level as those for younger workers. Table 2: Increase in CPF Contribution Rates for Older Workers Employee Age (Years) Increase in Contribution Rates (% of wage) Contribution by Employer Contribution by Employee Total Above 50 to Above 55 to Above 60 to The increase in employer contribution rates will go to the Special Account. The increase in employee contribution rates will go to the Ordinary Account. The existing limits on tax deduction for employers statutory CPF contributions and tax relief for employees CPF contributions will be raised accordingly. MINISTRY OF FINANCE

4 Note: 1. The rates in Tables 2 and 3 are applicable for Singapore Citizens and Singapore Permanent Residents (SPRs) in the 3rd year and onwards of obtaining SPR status and earning monthly wages of $750. As per current practice, the employee CPF contribution rates for employees earning >$500 but <$750 will be pro-rated. Further details on the changes to the contribution rates will be made available on CPF Board s website: 2. The Ordinary Wage Ceiling will be at $6,000. MINISTRY OF FINANCE 4

5 (C) Enhancing Progressivity through Extra CPF Interest An additional 1% Extra Interest on the first $30,000 of CPF balances will be provided from the age of 55. This will take effect from 1 January Together with the existing 1% Extra Interest on the first $60,000 of CPF balances, older CPF members can earn up to 6% interest on their balances (See Table 4). Table 4: CPF interest rate for members aged 55 years and above from 1 January 2016 CPF Balances Interest Rate 2 First $30,000 6% Next $30,000 5% Amounts above $60,000 4% (D) Silver Support Scheme Silver Support is a permanent scheme targeted at the bottom 20% of Singaporeans aged 65 years and above, with a smaller degree of support extended to cover up to 30% of seniors. Together with the Workfare Income Supplement it will be a major scheme in addressing income and wealth inequalities. Eligibility will depend on several factors, including one s lifetime wages, household support and housing type. It is estimated that about 150,000 of today s elderly will qualify and receive payouts of between $300 to $750 on a quarterly basis, from around the first quarter of The scheme is expected to cost Government about $350 million in the first full year. 2 Based on prevailing interest rates on balances in Retirement, Special and Medisave Accounts. Balances in Ordinary Account can earn up to 4.5% for members aged 55 and above. MINISTRY OF FINANCE 5

6 (E) Additional Background Information CPF Salary Ceiling The CPF salary ceiling sets the maximum amount of CPF contributions payable for Ordinary Wages. The CPF salary ceiling was last increased from $4,500 to $5,000 in September CPF Contribution Rates for Older Workers CPF contribution rates for older workers were lowered in the past to enhance their employability. The employment rate of older residents has since improved considerably, with good progress made by tripartite partners in wage restructuring and other efforts to enhance the employability of older workers. The employment rate of residents aged 50 to 54 years was 80%, comparable to the 82% employment rate of residents aged 45 to 49 years, as of June In 2012, after consultation with tripartite partners, the Government committed to eventually equalise the CPF contribution rates for workers aged 50 to 55 years with that for younger workers. The increase in CPF contribution rates for older workers has been phased in gradually to moderate the impact on business costs and take-home pay of the employees. Since September 2012, two increments in CPF contribution rates for older workers aged 50 to 55 years have been made, with smaller increases for workers aged 55 to 65 years. (F) More information Members of the public may visit or contact the CPF Board for more information. Hotline number: or MINISTRY OF FINANCE 6

Introduction Introduction Social Security Framework Singapore s social security framework is founded on the principles of self-provision and self-reliance. The responsibility to provide for one s own retirement

ADDITIONAL AVENUES FOR HIGHER TAX DEDUCTION FOR MEDICAL EXPENSES Aim 1 This circular sets out the extension of higher tax deduction for medical expenses to arrangements where employers provide their employees

Private Employee Benefits SINGAPORE 2014 Your Local Link to IGP in SINGAPORE: Aviva Aviva entered the Singapore market in July 2001 through the acquisition of the former Insurance Corporation of Singapore.

CPF LIFE information booklet 1. Introduction to CPF LIFE 4 1.1 What is CPF LIFE? 1.2 Will I be placed on CPF LIFE? 1.3 What are the CPF LIFE plans available? 2. Starting on CPF LIFE 7 2.1 When do I have

FOR IMMEDIATE RELEASE Press Release STRONG SUPPORT FOR BABY PACKAGE The Steering Group on Population said today that public feedback on the new parenthood package has been very positive on the whole, with

Background: How the CPF system works today to provide retirement payouts 1. Today when a CPF member reaches the age of 55, a Retirement Account (RA) is created, and savings from his Special Account (SA)

SUPPLEMENTARY NOTES Risk Management, Insurance And Retirement Planning (2 nd Edition, June 2012) Date Of Issue : 9 January 2015 The following amendments have NOT been incorporated in the study text. They

2016 BUDGET IN BRIEF Partnering for the Future A Spirit of Partnership Last year, we celebrated SG50 as a nation. This year, we start our journey for the next 50 years. Everyone has a role, and together,

CPF: Your Assurance in 1 Reaching 55 At 55, it s time to make your next move CONTENTS 02 Introduction 03 Decisions to be made: How much monthly payouts do you need during retirement? How much can you withdraw

Background: How the CPF system works today 1. Under today s rules, CPF members are required at age 55 to set aside part of their CPF savings to provide for monthly payouts in retirement from the Payout

CPF: Your Assurance in Retirement 1 Reaching 55 At 55, it s time to make your next move CONTENTS 02 Introduction 03 Decisions to be made: What happens when you turn 55? How much can you withdraw at 55?

PFRS ENROLLMENT BY MEMBERSHIP TIER PENSIONABLE SALARY LIMITS The PFRS contribution rate for Tier 1 members enrolled on or before May 21, 2010, is applied to the full pensionable salary up to the federal

PENSIONS AT A GLANCE 29: RETIREMENT INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions UNITED STATES United States: pension system

Opportunities for the Future Assurance for Our Seniors Budget In Brief Backdrop to Budget 2014 In the last few Budgets, we have focused on building a nation of opportunity and an inclusive society where

Prepared by Prudential Assurance. I SUMMARY Social Security Eligibility Retirement Age Central Provident Fund (CPF) for employees who are Singapore citizens and Singapore permanent residents only. Work

REACH MEDIA RELEASE Retirement Adequacy, Healthcare and Cost of Living are Top Concerns for Budget 2015 A Pre-Budget 2015 Feedback Exercise to gather the views of Singaporeans identified Retirement Adequacy,

Pension Schemes for Private Sector Workers in Selected Countries in Asia An Overview The major demographic, economic and social changes that are taking place in both the developed and developing countries

FREQUENTLY ASKED QUESTIONS ON EMPLOYMENT RIGHTS 1. COVERAGE 1.1 Am I covered under the CPF Act and/or the Employment Act? 2. SALARY 2.1 I have left my company but my employer has not paid me my salary.

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions PORTUGAL Portugal: pension system in 2008

SUPPLEMENTARY RETIREMENT SCHEME (SRS) The SRS is part of the Singapore government s multi-pronged strategy to address the financial needs of a greying population by helping Singaporeans to save more for

106 FISCAL OUTLOOK FOR FINANCIAL YEAR 2013 2 FiScAl outlook FoR FiNANciAl YEAR 2013 2.1 Budget for FY2013 A basic surplus of $0.3 billion (or 0.1% of GDP) is expected for FY2013. After factoring in Topups

IRAS CIRCULAR NOT ORDINARILY RESIDENT SCHEME Published by Inland Revenue Authority of Singapore Published on 7 July 2008 Annexes B & F updated on 29 August 2008 Disclaimers: IRAS shall not be responsible

2014/15 Key Superannuation Rates and Thresholds These are the key rates and thresholds that apply in relation to superannuation contributions and benefits, superannuation guarantee and co-contributions.

Guide to Social Security and Retirement in the United States Social Security (SS) is a government program that pays monthly benefits to: retired workers; workers who are disabled; certain family members

Draft Legislation Social Security Individual Retirement Account Problem 1. The solvency and sustainability of Social Security increasingly looms as a critical problem. As Americans continue to live longer

26 February 2013 ENHANCEMENTS TO FOREIGN MANPOWER POLICY FOR QUALITY GROWTH AND HIGHER WAGES As announced by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in the 2013 Budget Statement,

SUPPLEMENTARY RETIREMENT SCHEME (SRS) The SRS is part of the Singapore government s multi-pronged strategy to address the financial needs of a greying population by helping Singaporeans to save more for

JOINT NEWS RELEASE FOR IMMEDIATE RELEASE 22 February 2016 CPF Interest Rates from 1 April 2016 to 30 June 2016 Up to 3.5% per annum on the Ordinary Account Up to 5% per annum on the Special and Medisave

TRIPARTITE GUIDELINES ON THE RE-EMPLOYMENT OF OLDER EMPLOYEES (Released on 18 May 2016) Introduction 1 As part of its efforts to help older employees remain economically productive, the Government enacted

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions UNITED KINGDOM United Kingdom: pension system

Build your Wealth VivoCash Financial returns till age 100. Living the moment, protecting the future. A dream home. A comfortable lifestyle. And the freedom to travel wherever you want. In recent years,

COUNTRY REPORT FOR SINGAPORE - By s Federation - Performance of Singapore s Economy 1. Singapore s economy grew by 4.1% in 2013, up from the 1.9% in 2012. The growth was led by the financial sector which

Austria Belgium Temporary disability The insured receives the cash sickness benefit until a decision on permanent disability is made. The employer pays 100% of earnings for up to 12 weeks (plus additional

EXTRACT OF DEPUTY PRIME MINISTER AND MINISTER FOR FINANCE MR THARMAN SHANMUGARATNAM S BUDGET DEBATE ROUND-UP SPEECH 2015 A FAIR SYSTEM: NOT JUST FOR TODAY, BUT THE NEXT GENERATION Progressive and Sustainable

FREQUENTLY ASKED QUESTIONS ON EMPLOYMENT RIGHTS 1. COVERAGE 1.1 Am I covered under the CPF Act and/or the Employment Act? 2. SALARY 2.1 I have left my company but my employer has not paid me my salary.

Pensions - Tax Reliefs Types of pension schemes There are two broad types of pension schemes from which an individual may eventually be in receipt of a pension: Occupational schemes Personal Pension schemes.

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions ICELAND Iceland: pension system in 2008 The

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions AUSTRALIA Australia: pension system in 2008

Our Vision Pensions Tax Reliefs To become the Best Provider of Solutions for Businesses in Coventry & Warwickshire Types of pension schemes There are two broad types of pension schemes from which an individual

Centrelink payments and entitlements, pension bonus scheme and work bonus 1 January 2014 While there are many different Centrelink payments and entitlements available, in this flyer we have outlined the

11. PENSIONS AT A GLANCE 215: COUNTRY PROFILES AUSTRIA Austria Austria: Pension system in 214 The pension system consists of a definedbenefit public scheme with an incometested top-up for low-income pensioners.

www.rfawealth.com Wealth Strategies The Importance of Age-Based Tax Planning Part 9 of 12 Age Based Tax Planning WEALTH STRATEGIES Page 1 In today s world, more and more of the responsibilities of preparing

Pensions Tax Reliefs Types of pension schemes There are two broad types of pension schemes from which an individual may eventually be in receipt of a pension: Workplace pension schemes Personal Pension

AGEING FAMILIES IN SINGAPORE Insight Series Paper 02/2015 INSIGHT SERIES Ministry of Social and Family Development, Republic of Singapore Reproductions of extracts for this publication are allowed, together

Sample Part-Time Employment Contract This sample contract is designed to help you draft an employment agreement. It includes the essential elements of a typical contract. You may modify it to suit your

COMPANY ANNUITY PLANS AND FEDERAL OLD-AGE INSURANCE M. B. FoLsoM* Old-Age Assistance Strong arguments can be made for providing pensions in a systematic way to aged persons who have no means of subsistence.

FEDERAL BUDGET 2009 SUMMARY 13 May 2009 As widely expected, last nightʼs Federal Budget contained a number of proposals that will affect clients. Importantly, the proposals will require passage of legislation

RETIREMENT November 2012 Put your clients on the TTR track Adviser guide to transition to retirement strategies About OnePath OnePath is one of Australia s leading providers of wealth, insurance and advice

SAF GROUP TERM LIFE POLICY GROUP POLICY No. 2000002 The SAF Group Term Life policy is designed for SAF and MINDEF personnel as well as those who have committed to National Service. This policy underwritten

Order Code RL30631 CRS Report for Congress Received through the CRS Web Retirement Benefits for Members of Congress Updated January 21, 2005 Patrick J. Purcell Specialist in Social Legislation Domestic

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions GERMANY Germany: pension system in 2008 The

Making the Most of Your Super For many people, super is one of the best ways to accumulate wealth. The Government provides tax benefits to encourage people to fund their own retirement. With more Australians

,000 % 5 TH ASIAN & JAPAN HIGH LEVEL OFFICIALS MEETING ON CARING SOCIETIES (Summary of Country Presentation) 1 Introduction 1.1 Singapore is a city state with a population of 4.5 million people, of which

R. LITVINOV, PhD student in Law, Kharkiv National University of Internal Affairs, SOCIAL SECURITY SYSTEM IN THE USA: GOOD OR BAD EXPERIENCE FOR UKRAINE? Analyzing the process of implementation of the pension

Q+A AOW: Basic Old age pension What is the AOW? The General Old Age Pensions Act (AOW) is a basic pension for people aged 65 and over. In addition, the AOW grants a supplementary allowance to people entitled

Interim Disability Assistance Programme for the Elderly (IDAPE) This form is used for patients/clients to undergo household means-testing 1 for the purpose of application for IDAPE (see description below).

November 2012 Page 1 of 13 MRC Redundancy Compensation Scheme 2011 USING THIS BOOKLET This booklet is a guide to the benefits to be provided in the event of redundancy and came into effect from 26 September

ANALYSIS OF REVENUE AND EXPENDITURE Financial Year 204 Distributed on Budget Day: 2 February 204 EXPLANATORY NOTES This document summarises and provides relevant highlights of the FY204 Revenue and Expenditure

Civil Service Compensation Scheme Q&A December 2010 The new Civil Service Compensation Scheme (CSCS) which takes effect on 22 December 2010 sets out the level of compensation that Departments can pay their

Retirement planning with Group Superannuation After a valuable professional career with an organization, employees require the security of a regular income flow when they retire. Organizations help employees

Peace of Mind VivoLife Flexible payment terms. A lifetime of protection. VivoLife gives you the flexibility to choose from 3 levels of enhanced protection 1 for you and your loved ones. What s more, enjoy